A few days before celebrating the end of the year, Sergio Massa gave an optimistic prognosis: he ensured that the rise initiated by the blue dollar in December was about to quit and even pull back in January on improving dollar bonds and equities. The bullish streak in the stock market ended, but the blue did not stop and yesterday touched a new nominal record of $378, after having risen by $8, a figure that has started to generate concern to the Ministry of Economy.
Although the price is still below inflation, the feeling in Massa’s team is that 8 consecutive increases are looming a more “complex” summer.” for lack of foreign exchange, the side effect of the soy dollar and limited wiggle room. “Blue keeps going up, it’s easier to go up than down, there are no sellers and everyone is buying, Those who go to Punta prefer to buy tickets in dollars, it costs less than Qatar“, they stressed in an official dispatch.
In Economy they believed that the recovery came only from the hand of the tourist dollar with the recognition of a price close to the equity dollar (MEP) for non-residents, a measure that doubled the volume of these operations, and about US$60 million embezzled who worked in the blue. That gap between parallels, however, ended up impacting financial dollars. “They saw they were late and went out to buy.” explain the official sources.
Officials also identify other reasons behind what they privately describe as a “fight”. Starting with the shortage of dollars due to drought, a cost that the Rosario Stock Exchange estimated in the last few hours at 10.4 billion dollars in 2023. But they also see a change in demand for pesos since December, when the Central Bank had to issue dollars to buy soybeans for $230.
That extraordinary issue, added to the purchase of Treasuries and SDRs, injected near 600,000 million dollars. It is a mass of pesos that the Central has not been able to absorb entirely with the issue of Leliq to the banks, so the monetary base expanded in December compared to November, without a corresponding increase in demand for pesos. “There is a very strong demand for dollars and it is worrying”recognize in economics.
Excess weight is also monitored by Kirchnerism. A recent report by the team of former Undersecretary of Commerce, Roberto Feletti, highlighted that “the velocity of money circulation in the fourth quarter of this year would have increased (according to our estimates) compared to the same quarter of 2021 by 8.27% , this is a decline in the demand for money balances.”
In the meantime, the Government is proceeding with prudence for the fear that the measures to contain the dollar will have repercussions on the fixed terms or bonds in pesos. After raising the interest rate to 107% per annum (effective), the BCRA decided to keep it unchanged since December, even after inflation hit a record 94.8% in 2022, the highest level since 1991.
For Fernando Marull, “Massa can raise interest rates and give a little more fiscal order to encourage sticking in pesos, show themselves stronger in reserve”. But those close to the minister believe that the rate is already “positive”, ie above the expected annual inflation of around 80% if the monthly rate of 5.1% in December were maintained. And on the other hand, they bet on keeping it below what the Treasury pays the banks.
The inflationary data has influenced, for the moment, the menu offered by the Ministry of Finance to tryr to renovate $350,000 million in the debt auction this Wednesday, with the incorporation of inflation-linked and dollar-linked bonds. With this coverage, Economy has begun to price in a pessimistic reading of the market, almost paralleling the tightening of price controls with the support of Truckers.
The focus is now on the Central Bank. The government must finance the fiscal deficit by issuing debt in pesos, and for this it needs Miguel Pesce lower the yields of the Leliq. Thus, banks would be forced to opt for Treasury bills, today 4% above inflation (CER). But that move has a risk: releasing pesos that put pressure on the dollar, as happened to Martín Guzmán.
Source: Clarin
